Are the managers of the franchisee considered 'Releasing Parties' when granting a release to Red Wagon Club?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
Consistent with the previous introduction, you, on your own behalf and on behalf of your successors, heirs, executors, administrators, personal representatives, agents, assigns, partners, owners, managers, directors, officers, principals, employees, and affiliated entities (collectively, the "Releasing Parties"), hereby forever release and discharge us and our current and former officers, directors, owners, managers, principals, employees, agents, representatives, current or former affiliated entities, successors, and assigns (collectively, the "Released Parties") of and from any and all claims, damages whether at law or in equity and known or unknown, demands, causes of action, suits, duties, liabilities, and agreements of any nature and kind (collectively, "Claims") that you and any of the other Releasing Parties now has, ever had, or, but for this document, hereafter would or could have against any of the Released Parties, including without limitation, any and all Claims in any way (1) arising out of or related to the Released Parties' obligations under the Franchise Agreement, or (2) otherwise arising out of or related to your and the other Releasing Parties' relationship, from the beginning of time to the date of your signature below, with any of the Released Parties. You, on your own behalf and on behalf of the other Releasing Parties, further covenant not to sue any of the Released Parties on any of the Claims released by this paragraph and represent that you have not assigned any of the Claims released by this paragraph to any individual or entity who is not bound by this paragraph.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–31)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, the managers of a franchisee are included in the definition of "Releasing Parties." This means that when a franchisee grants a release to Red Wagon Club, it is doing so not only on its own behalf but also on behalf of its managers. This release covers a broad range of claims and liabilities.
Specifically, the FDD states that the franchisee, on its own behalf and on behalf of its "successors, heirs, executors, administrators, personal representatives, agents, assigns, partners, owners, managers, directors, officers, principals, employees, and affiliated entities (collectively, the 'Releasing Parties'), hereby forever release and discharge" Red Wagon Club from any and all claims. This encompasses all known and unknown claims, damages, and causes of action that the franchisee or any of the other Releasing Parties, including managers, might have against Red Wagon Club.
This has significant implications for a prospective Red Wagon Club franchisee. It means that any legal claims or issues that a manager might have against Red Wagon Club are also waived when the franchisee signs a general release. The franchisee also agrees to prevent the Releasing Parties from suing Red Wagon Club. Therefore, franchisees need to be aware of the scope of this release and ensure that their managers understand its implications, as it could affect their legal rights against the franchisor. Franchisees should consult with legal counsel to fully understand the ramifications of this clause before signing any release.